"We believe that the bigger subsidiary CRLL has now reached the necessary milestones to be listed in the Colombo Stock Exchange. We will take steps to list the company in the first half of the year 2008," Mr. Mayura Fernando, Chairman of Capital Reach said.

"This will be followed by the listing of the parent company CRHL possibly in the second half of the same year."

Cabraal who resigned as chairman of the company following acceptance of public office has been thanked by the present chairman "for guiding us through the difficult period of infancy and laying a strong foundation on which we continue to build our business."

The governor’s wife, Mrs. Roshini Cabraal, succeeded Cabraal as chairman but resigned following his appointment as Governor of the Central Bank. Following President Mahinda Rajapakse’s election, Cabraal was first appointed Secretary to Ministry of Plan Implementation before taking on his current position as Central Bank Governor.

Capital Reach Holdings has three subsidiaries, Capital Reach Leasing (66.56%), Capital Reach Credit (67.03%) and Capital Reach Business Development (Pvt) Limited (100%) with the first two companies purchased from Vanik for a part cash and part share consideration.

Fernando explained the delay in presenting the company’s first annual report for several reasons including the inability of Messrs. K.P.M.G. Ford, Rhodes, Thornton and Company to assume duties as the company’s auditors due to a technical issue. Ernst & Young was thereafter appointed in November 2006.

"The other major reason for the delay was the complicated nature of the process of acquiring the two subsidiaries. This resulted in tedious calculations to assess the intangible assets and agreeing on the subsequent accounting treatment in keeping with the current accounting standards," Fernando said.

He has said that the financial statements for the year ended March 31, 2007 is currently under audit and the second annual report of the company will be out during the next quarter.

Capital Reach raised a total of Rs.219.5 million in a private placement of shares concluded in February 2006. Together with shares worth Rs.52.5 million issued to Vanik as part consideration for the two subsidiaries, the share capital now stands at Rs.272 million. He said that Vanik was paid Rs.45 million cash and a further sum of Rs.149 million was invested in the subsidiaries purchased from Vanik.

During the first year of operations, the company was described to have performed "satisfactorily" although a loss of Rs.9.2 million was posted for the period under review which included the writing off of Rs.5.7 million pre-operational expenses.

Capital Reach Leasing posted Rs.41.7 million interest income in the nine months ended March 31, 2007 and an after-tax profit of Rs.6.8 million. After discounting Rs.2.3 million minority interest, this subsidiary has contributed Rs.4.5 million to the group bottom line.

The subsidiary’s leasing and hire purchase portfolio had grown 78% from Rs.169.3 million to Rs.772.5 million during the period under review while its term loan portfolio grew 81% to Rs.11.7 million from Rs.6.5 million.

Fernando noted that the lending portfolios and revenue have grown over five fold in less than two-and-half years and the high rate of growth which continues was expected to gradually slow down over the next five years.

He said that Capital Reach Leasing and Capital Reach Credit were proud of the quality of their lending portfolios with both companies maintaining their non-performing loans at approximately one percent of the total portfolio.

SunTex International Holdings Limited with 27.6%, Vanik Incorporation Limited (19.3%), Aegis Fund Management (Pvt) Limited (9.2%), Finco Group of Companies (9.2%), Readywear Industries Limited (3.7%) and Mr. G. Nadarajah (3.7%) are the six biggest shareholders of the company where the top 10 shareholders also include Prudential Assurance Lanka Limited and MAS Holdings (Pvt) Limited.

One foreign institution and three foreign individuals own approximately 29% of the company.

The issued share capital of the company is Rs.272 million. A reserve fund of Rs.0.1 million and a retained loss of Rs.31.7 million (for the group) were written in the books as at March 31, 2006.

The directors of Capital Reach Holdings are Messrs. Mayura Fernando (Chairman/MD) D. Muthukumarana, Sumant Batra, Mrs. Priyanthi Pieris, Sarath Weerasooria, Anura Fernando and C. Ramachandra.